Category: Brazil

Marfrig has updated its plans to issue shares and has made some changes that dramatically reduce the amount of proceeds it stands to cull from the sale. The Brazilian meatpacker now plans to issue 60.8m shares in its base offering, with the option to increase the deal by a 9.1m share hot issue, and a 12.2m share greenshoe. In total the, deal could yield proceeds of BRL1.6bn if priced in the BRL20.00 area. The previous proposal involved a sale of a total of 232m shares plus 34.8m hot issue shares and 46.4m greenshoe shares, according to the original material fact on the deal. That could have yielded the company BRL6.3bn at the BRL20.00 level. The timing of the offering has also been pushed back by less than a week, and is now scheduled for the second week of November. The deal is being led by Bradesco BBI, with Credit Suisse and Itau BBA as joint leads.

Brazil’s Vision Investments made the second and final closing on a $210m Brazil Real Estate Opportunities Fund (Breof), says shop co-founder Ken Wainer. A first close in April 2008 raised 30% of the total amount, he adds. Investors in the fund include international pension funds, insurance companies, family offices and fund of funds. Breof, for which Wainer expects a 25% rate of return in USD, is focused on Class A office developments, office retrofits, and affordable housing development. For the latter, Wainer says Vision has developed a scalable platform in Sabia Residencial, an affordable housing development firm based in Sao Paulo. Already the fund has committed approximately two-thirds of the total capital commitments to two office developments, one a retrofit, and seven affordable housing projects, all located in Greater Sao Paulo and Rio de Janeiro. Vision, which has almost $2bn in AUM, holds on to investments for 2-6 years on average, Wainer says. He also tells LatinFinance that Vision is already in talks with investors to raise another real-estate focused fund, with fundraising slated to begin in Q1 2010. The new fund aims to raise $500m, he adds.

Banco BMG has sold $300m in Tier-2 bonds amidst challenging market conditions, joining the ranks of Brazilian banks that have recently tapped the subordinated debt market. The Ba3/B issue priced at 98.15 with a 9.950% coupon to yield 10.250%, or UST plus 679.6bp, in line with 10.250%-area guidance. The book was heard to be just north of 1x subscribed, and the bond was heard trading flat late Thursday. The deal follows heavy investor interest in subordinated issuance from larger Brazilian banks. Bradesco sold $750m in 2019 Tier-2 notes to yield 6.750% in September on $2bn in demand, followed by Banco do Brasil’s $1.5bn 9.500% perpetual which saw $13bn. “Banco do Brasil and Bradesco are the premier banks in Brazil. This might not have the same draw,” says an EM investor who participated, referring to BMG, which is a mid-cap institution. The bank plans to use proceeds for general corporate purposes, including increasing the size of its loan portfolio and to boosting its reference capital. Morgan Stanley, Santander, BTG Pactual and UBS managed the sale. A $225m 60-year hybrid from Peru’s BCP is expected tomorrow, with guidance coming in the early morning.

Brazilian power distributor Terna Participacoes SA has completed a BRL550m promissory note sale. The 1-year notes pay interest at 113% of the DI rate. Terna plans to use most of the proceeds to pay off outstanding debts to its Italian parent Terna Rete. Buyers included 2 pension funds, and 4 financial entities linked to the issuer or managing banks, according to regulatory documents. Banco do Brasil, BTG Pactual, Citi and HSBC managed the sale.

Brazil’s Banco BMG is set to price a $300m Tier-2 bond today, having launched yesterday at 10.25% yield, according to bankers on it. An extensive US, European and Asian road show wrapped up Wednesday. Morgan Stanley, Santander, BTG Pactual and UBS are managing the sale, rated Ba3.

BNDESPar has filed to raise BRL1bn from the sale of bonds on the domestic market. It plans to issue 2 series, though does not give additional information about them. Banco do Brasil is managing the sale, which still awaits regulatory approval. The shareholding and investment arm of the BNDES national development bank is rated AAA on a national scale. Its last domestic debenture sale was a BRL135bn 2011 offering in July 2007.

The board of Natura Cosmeticos has approved the issue of BRL350m in domestic bonds. The Brazilian cosmetics company does not reveal other details of the transaction, which must still be approved by regulators.

Three board members of Brazilian internet company IdeiasNet say they plan to acquire up to all of the company’s outstanding shares at BRL5.23 per unit. The bid values the company at BRL544m, below the company’s market cap at close on Friday of BRL584m based on the BRL5.60 share price. The 3 executives, chairman Carlos Pedroza Aguinaga, Luiz Arthur Andrade Correia, and Lars Fuhrken-Batista, have relinquished their titles to pursue the acquisition, which can be done in conjunction with other investors, according to a statement. Fuhrken-Batista is the younger brother of Eike Batista, whose Centennial Asset Mining Fund has an 8.5% stake in IdeiasNet. Other leading shareholders include the Lorentzen family, with 9.8%, and UBS, with 7.4%. The offer to acquire the shares will be done through a public tender. In May 2008, Batista acquired a 6.5% stake in IdeiasNet, saying the company could eventually have a market cap of $1bn given its growth potential and business focused on installing internet connections across the country. The company went public in May 2000. After a plunge in the months following the beginning of the crisis, its stock is close to regaining its September 1 2008 level of BRL5.88.

Brazilian hedge fund Maua Investimentos, run by former central banker Luiz Fernando Figueiredo, is merging with Sekular Investimentos, a fund owned by former Banco Safra executives that specializes in structured credit and wealth management. The joint venture, to be called Maua Sekular Participacoes, is aimed at strengthening both organizations, especially Maua, which has for years sought to expand its product offering beyond multimercado and global macro hedge fund strategies. The merger adds some BRL400m in AUM to Maua’s existing BRL600m, taking the total to BRL1bn. That is still below the BRL2.5bn Maua had at its peak in December 2007, but also 5 times the BRL200m it had at its September 2008 low. Maua’s offshore fund, which mirrors its flagship local vehicle, had $157m under management at the end of August. The credit investment fund will focus on managing asset-backed receivables funds and other structured products, including real estate funds, a Maua IR official tells LatinFinance. It will be headed by Joao Carlos Chede, who used to lead credit operations for Banco Safra. Less exotic instruments like debentures and other local debt structures will likely be included in the fund, or comprise a separate vehicle farther down the line, says the official. Maua also acquires a strong private wealth platform led by former Safra executive Joao Cesar Tourinho and comprised of a Sekular’s roster of ultra high net worth investors. Maua has long sought to have a wealth management business to complement its offering to existing clients, says the executive.